Alabama Division Order

• Category: Oil Gas and Minerals - Division and Transfer Orders
• State: Multi-State
• Control #: US-OG-068
• Format: Word; Rich Text

Description

This is the model form which many companies now use. A division order in Alabama is a legal document that outlines the ownership interest and distribution of revenues from the production of oil, gas, or minerals. It serves as a contract between the mineral owner and the operator or producer of the resource. The division order defines the various interests, including the percentage of ownership and the specific tract or well associated with it. The Alabama division order contains crucial information such as the owner's name, address, the legal description of the property, and the specific interest percentage granted to the owner. It also includes the terms and conditions of the agreement, including the payment procedure, royalty rates, and any deductions that may occur before the distribution of proceeds. There are a few different types of division orders commonly used in Alabama: 1. Furnished's Division Order: This is the most common type of division order used in Alabama, where the mineral owner provides the operator with their ownership information and agrees to the terms and conditions for revenue distribution. 2. Supplementary Division Order: In certain cases, an operator may request additional information or documentation from the mineral owner. A supplementary division order is used to provide this additional information, ensuring clear ownership and payment instructions. 3. Leasehold Division Order: This type of division order is used when multiple parties have an interest in the mineral rights under a lease. It outlines the ownership percentages and revenue distribution mechanism among the leaseholders. 4. Pooling Division Order: Pooling division orders are prepared when several tracts or mineral interests are combined or "pooled" for the purpose of drilling or production. This type of division order ensures the distribution of revenue among all the pooling participants based on their respective percentages. It is important for both mineral owners and operators to thoroughly review and understand the terms of the division order before signing, as any errors or discrepancies could lead to disputes or financial losses. Seeking legal advice is advisable to ensure a fair and accurate division order that protects the rights and interests of all parties involved.

A division order in Alabama is a legal document that outlines the ownership interest and distribution of revenues from the production of oil, gas, or minerals. It serves as a contract between the mineral owner and the operator or producer of the resource. The division order defines the various interests, including the percentage of ownership and the specific tract or well associated with it. The Alabama division order contains crucial information such as the owner's name, address, the legal description of the property, and the specific interest percentage granted to the owner. It also includes the terms and conditions of the agreement, including the payment procedure, royalty rates, and any deductions that may occur before the distribution of proceeds. There are a few different types of division orders commonly used in Alabama: 1. Furnished's Division Order: This is the most common type of division order used in Alabama, where the mineral owner provides the operator with their ownership information and agrees to the terms and conditions for revenue distribution. 2. Supplementary Division Order: In certain cases, an operator may request additional information or documentation from the mineral owner. A supplementary division order is used to provide this additional information, ensuring clear ownership and payment instructions. 3. Leasehold Division Order: This type of division order is used when multiple parties have an interest in the mineral rights under a lease. It outlines the ownership percentages and revenue distribution mechanism among the leaseholders. 4. Pooling Division Order: Pooling division orders are prepared when several tracts or mineral interests are combined or "pooled" for the purpose of drilling or production. This type of division order ensures the distribution of revenue among all the pooling participants based on their respective percentages. It is important for both mineral owners and operators to thoroughly review and understand the terms of the division order before signing, as any errors or discrepancies could lead to disputes or financial losses. Seeking legal advice is advisable to ensure a fair and accurate division order that protects the rights and interests of all parties involved.